Status Incentives and Performance

Studies in economics and management suggest that people invest effort to achieve pure status, and this investment increases in status incentives. We design field experiments to investigate these two behavioral hypotheses. We define status as the subjects' relative rank in their group based on their performance in a task. We explore two real tasks. In both of the tasks, subjects' earnings are nominal and independent of their performance; so status‐seeking preference should be the sole reason for achieving higher ranks. Our results indicate that inducing higher status incentives may not necessarily improve individual performance and may depend upon the task.